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Uk Government Responses For The Financial Crisis
UK Government Responses to the Financial Crisis
UK government was very swift in its response the financial crisis. Various measures were taken to
address the economic anomaly that came with the crisis. These range from various monetary
policies to fiscal policies. Some of these policies are discussed below:
Reduction in interest rate: In March 2009, UK government through Bank of England reduced
interest rate from 5.0 % in September 2008 to 0.5 %. Figure 7 below shows UK interest rate level
from a decade prior to the crisis period.
Figure 7: Official Bank Rate and Inflation Source: Office for National Statistics
The aim rationale behind reduced interest rate was to provoke recovery from the crisis. This targeted
increase in consumers as well as firms and government spending since incentive to save had been
eroded. This measure not only increased aggregate demand, it also aid commitment to new
investments. Additionally, monthly cost of mortgage repayment was witnessed which in turn,
provided more disposable income and make investment in property market more lucrative.
Since reduced interest rate made it unattractive to save money, currencies were less demanded
thereby causing fall in the currency values. This therefore had a multiplier effect on export and
import. This explains why during post crisis period, UK exports became more competitive.
The challenging part of this measure was that during the crisis, banks had limited liquidity which
necessitated their longing for
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Essay On The United Kingdom
The United Kingdom consists of four different countries. England, Scotland, Wales, and Northern
Ireland. This is an island nation in Northwestern Europe. Located at 55.371В°N, 3.4360В°W, this
island is 93,628 mi2. This is Europe's largest island. The official language of the island is English
and the capital is London. The major religion is Christianity then Islam and Hinduism. There are
multiple different ethnic groups in the United Kingdom some are British African, White/black
British, Mixed, and Irish to name a few of them (United Kingdom).
The chief crops are wheat, barley, oats and potatoes. Queen Elizabeth II is the Monarch of the
United Kingdom, and the Prime Minister is Theresa May. On Queen Elizabeth's 90th birthday she
had held...show more content...
In the last five years the UK's exports have decreased by –11.966% (OEC).
The total labor force of the UK comprises of people age 15 years or older, they have to meet the
International Labour Organization definition of the economically active population. The definition
is "All people who supply labor for the production of goods and services during a specified period"
(Trading Economics). The highest percent of a labor force is in services they have 83.5% while
industry has 15.2% and agriculture has 1.3% (CIA). In 2013 the UK was paying $7.81 for the
minimum wage compared to the US $7.25, today the US's minimum wage is still $7.25. There
are now different types of minimum wage. There is a wage for apprentices, people that are not
entitled to the minimum wage, voluntary work, and work experience and internships (GOV.UK).
The GDP of the United Kingdom in 2016 was 2.619 trillion dollars. This represents 4.22% of the
world's economy. "The GDP measures the national income and output for a given country's
economy" (Trading Economics). The GDP per capita is $39,899.39. GDP per capita is the total
output divided by the number of people in the population. So you can figure out the average output
per person in the United Kingdom. Per capita helps to compare one country to another, it shows the
relative performance of the countries. The

Rising Inflation in the UK
Inflation; 'a situation in which prices rise in order to keep up with increased production costs...
result[ing] [in] the purchasing power of money fall[ing]' (Collin:101) is quickly becoming a problem
for the government of the United Kingdom in these post–recession years. The economic recovery,
essential to the wellbeing of the British economy, may be in jeopardy as inflation continues to rise,
reducing the purchasing power of the public. This, in turn, reduces demand for goods and services,
and could potentially plummet the UK back into recession. This essay discusses the causes of
inflation, policy options available to the UK government and the Bank of England (the central bank
of the UK responsible for monetary policy), and the effects...show more content...
In order to close this inflationary gap, the government should use deflationary FP. By decreeing
government spending (G), (therefore decreasing injections into AD), or increasing taxes (T),
(increasing withdrawals from the economy), disposable income of the population can be reduced,
and in turn AD can be decreased. In figure 3 the inflationary gap is shown, with the gap a–b
displaying E>Y and c–d displaying W>J at the full employment level of national income. Other
uses of FP include changing the tax system to provide more incentives to increase AS, or to alter
the distribution of income, again through increases in T. One major problem with FP is that it is
severely affected by time lags. Inflation is difficult to forecast, and in order to smooth out the
business cycle, policy must be implemented at the right time, and with the necessary magnitude. If
the policies implemented fail to work within these two limits, they could extend a boom period of
unstable growth, or deepen a recession further, and so must be carefully implemented. These policies
all work to combat inflation; however they could all prove detrimental to the British economy in it's
present state.
Monetary policy, 'The government's policy relating to the money supply, bank interest rates, and
borrowing' (Collin: 130), is another tool available to the government to control inflation. Figure 4
shows, that by increasing the interest rate (r), from r1 to r2, the supply of money (ms) is reduced
from Q1

British Economic History, 1952-1963
Assess the period of 1952–1963
The period of 1952–1963 was in the heart of what is known as В‘the golden age ', which saw wide
scale growth of GDP and investment in Western Europe. The distinguishing features of the post war
period as identified by Matthews was of full employment, chronically rising prices, an abnormal ratio
of domestic investment to income and relatively high growth in income per capita by historical
standards. In this epoch of British history government policy principally tried to manage the level of
inflation, the balance of payments, the level of investment, the rate of growth and the level of
employment. The tools available to the government can broadly be divided into two categories
manipulating the level of...show more content...
The success of the policy should not be overestimated due to the fact that comparisons of UK
investment levels, fig 7, and those averages in Western Europe, fig 8, reveal that the UK is still
comparatively lagging. The increase in the investment rate did however hold significance for the
level of inflation during the period which was attributed to the shortage in the labour market. Sargent
argues that the higher levels of investment, fig 7, in new machinery led to a greater requirement of
labour than was released through the scrapping of old equipment and the growth of the labour
market, leading to wage push inflation. The period of 1952–1963 saw chronic rises in, prices as
illustrated in fig 4 and though the threat of inflation was of significant concern in the implementation
of policies the conservative government never really managed to control the rate of increases. There
were consecutive attempts to bring the level of inflation down with the government maintaining a
current account surplus throughout the period. Many of the policies were still deemed as having
too high of an inflationary risk, such as the expansionary policies of 1952–1955 where tax cuts were
offered during a period where the economy was overheating suffering chronic inflation. The most
successful of the deflationary policies employed during this epoch was that of Thorneycroft and
Amory in 1957 and

Economic Growth Of The Uk Economy
Economic Growth
Economic Growth is a measure of the percentage increase in either real gross domestic product
(GDP) or potential GDP of an economy. GDP measures the output of goods and services produced
by an economy by factors of production located within that economy.
The figure above shows the trend of UK's economic growth from 2008 to mid–2014. As illustrated
in the figure the credit crunch of 2007–08 hit the UK economy hard and caused a steeper drop in
real GDP than even the great depression of the 1930s. However, due to loosening of monetary and
fiscal policy, the UK experienced a partial recovery in 2010 and 2011 before heading back into a
recession as seen in Q1 2012. By the end of Q1 2013, the economy started picking up...show more
content...
The aim of quantitative easing is to increase private sector spending in the economy thereby
increasing real GDP.
As the figures above illustrate, there is a significant GDP gap. HM treasury forecasts a GDP gap of
–2.7% for 2012/2013. This, however, may underestimate the amount of spare capacity in the UK
economy. If the output gap were closer to –10% it would make a much stronger case for more
accommodative monetary and fiscal policy use.
Inflation
Inflation is a sustained increase in the general price level, leading to a fall in the purchasing power
of money. It is measured in two different ways, through the Retail Price Index (RPI) and the
Consumer Price Index (CPI). The difference between the two is that the RPI takes into account
different things compared to the CPI, such as housing costs.
Currently, inflation was at 0.3% in January, measured by the CPI, with the target level being 2%.
This fell from 0.5% in December due to 'Cheaper fuel and lower energy prices' . Illustrating this on
a demand and supply diagram, there would clearly be a rightward shift in the Short Run Aggregate
Supply (SRAS) curve, as costs of productions for firms have reduced.
One monetary policy enforced in the economy are low interest rates, set by the Central Bank. The
reason they are low is to influence aggregate demand in the economy. Low interest rates mean that
the cost of borrowing

Right To Buy Policy Analysis
A place to call home, a concept that much of society aspires to. A home is a sanctuary, a place to
raise a family; home after all, is where the heart belongs. However, does the notion that a house is
make a house any less of a home than a house that is owner occupied? Housing policy during the
latter part of the 20th century began to shift towards owner occupation. One policy in particular
completely changed the face of housing, it brought about the biggest shake up in housing history.
The Conservative Government's 'Right to Buy' scheme or 'Council House Privatisation' as written in
(Baldock, Mitton, Manning & Vickerstaff, 2012), formed part of the Housing Act 1980, the then
secretary of state for the environment, Michael Heseltine, stated "This bill lays the foundations for
one of the most important social revolutions of this century" (Jones, 2011). Therefore, this essay will
answer the question can the "Right to Buy" policy as introduced...show more content...
The new Conservative Government differed significantly from the Conservative Governments that
had been in power throughout the 'Butskellism' era. Butskellism is an acronym derived from the
cross party consensus on state welfare and housing that had dominated since the 1950s (Alcock,
May & Wright, 2012). The Conservatives New Right ideology was one that advocated privatisation,
managerialism and competitive markets. The ideology supported the sale and privatisation of
National commodities such as British Steel, British Telecom, and other utilities such as water, gas,
and electric (Bochel, 2012). Housing did not escape the Conservative Governments goal of
complete privatisation; according to Legislation.gov.uk (2015), in August 1980, chapter 51 of the
Housing Act 1980 incorporated the right to buy scheme. As supported by Baldock et al (2012), the
right to buy refers to a housing policy that supported the compulsory sale of council

Executive Summary : The United Kingdom
Executive Summary The United Kingdom (UK) is one of the largest economies in Europe
ranked at position 13 of the freest economies globally in 2015. The country recorded a GDP of
2.67817 trillion dollars in 2014 with an average annual GDP growth rate of 2.8% in the last five
years. The World Bank ranked UK in 10th position as the best place to do business in 2014 based
on its high regulations, robust business policies, highly skilled workforce, investors' protection,
developed infrastructure, and political stability. Since it is a member of the European Union (EU), the
country presents an opportunity for the company to access more than 500 million consumers in the
European market. This study recommends the establishment of a wholly owned subsidiary in the
United Kingdom to improve profitability and productivity.
Macro Environment The economic reforms initiated by Prime Minister Margret Thatcher since
1980's has made the United Kingdom record steady economic growth in the 1990s. However,
successive Labour governments increased government spending significantly. Since 2010, the
government upheld austerity as the principal of its economic policy. In 2014, the country recorded
its strongest economic growth since 2007 of 2.387 trillion dollars with GDP per capita at 39,350.64
dollars. The GDP increased significantly because of the enhanced performance of the construction,
manufacturing, and services sectors. Retail sales also increased with unemployment relatively at
lowest

The Uk Housing Market
INTRODUCTION In this essay, I will examine the factors that determine the price of houses in
UK housing market. Firstly we will have a look the past and the recent history of UK housing
market. The UK housing market has been booming in the past few years, with prices rising much
faster than household incomes. After its dramatic crash in the early 1990s, the UK housing market
has staged a remarkable recovery.1 In the early 1980s widespread financial deregulation raised the
availability of mortgage finance and stimulated the demand for housing. Real house prices rose by
over 4ВЅ percent per annum on average during the decade, with nominal house price inflation
peaking at 28 per cent in 1988. Monetary policy was subsequently tightened...show more content...
Buyers place offers for a property that the seller can either accept or reject.4 When the market
demand for properties in a particular area is high and when there is a shortage of good quality
properties then the balance of power in the market shifts towards the seller. This is because there
is likely to be excess demand in the market for good properties. Sellers can wait for offers on their
property to reach their minimum selling price. Conversely when demand both for new and older
housing is weak and when there is a glut of properties available on the market, then the power
switches to potential buyers. They have a much wider choice of housing available and they
should be able to negotiate a price that is lower than the published price4. When the demand for
houses in a particular area increases, perhaps because of an inflow of population into the area, or
a rise in incomes following a fall in unemployment, there is upward pressure on market prices.4
Often the supply of available housing in the market is relatively inelastic. This is because there are
time lags between a change in price and an increase in the supply of new properties becoming
available, or other homeowners deciding to put their properties onto the market. When demand shifts
outwards and supply is inelastic the result is a large rise in

Essay about The British Economy
Explain and illustrate the effect of this shock, and the courses of action the Government and the
Bank of England are, in your opinion, likely to take as a consequence. Discuss the implications for
business of both the initial shock and the following Government and Bank actions. You should
assume that the Government of the day has committed itself to full employment, "prudent" public
spending, and no major tax increases. The Bank has an inflation target of 2.5% pa.
A long run equilibrium is one in which the aggregate markets – financial, product and resource, are
in equilibrium simultaneously This is made possible by flexible wages and prices and is
represented by the intersection of the AD (aggregate demand) curve and the LRAS...show more
content...
As seen in Fig 2, cost–push inflation occurs with a leftward shift of the aggregate supply curve,
which is independent of any movements in aggregate demand. Because the demand for oil is
highly price inelastic, producers know that they can pass on the increased costs of the oil directly
to the consumer, without the need to absorb them at the firm level. They may also cut back on
production slightly in the short term in order to avoid a current surplus, however, as the demand
for oil would not be expected to drop significantly, this approach would be a cautionary one. A rise
of the price of oil by 15 percent would stimulate a single shift in the AS curve, which is known as a
supply shock – whereby there is a temporary inflation taking place while the price rise is passed
through the economy. A stabilisation of prices will then take place, and thus inflation will subside. A
blanket increase in the price of oil is hence known as import–price–push inflation, where the 'import
prices of a commodity increase independently of the level of aggregate demand'
In general however, good–price inflation has tended to be lower than service–price inflation. This is
as a result of the fact that there is a 'higher rate of growth of productivity in goods markets relative
to services markets. Goods are traded internationally to a greater extent than services and capital
equipment tends to replace labour to a greater degree in the production of

Uk Food Retail Market : The Market
UK food retail market – the market is long–established, with a fairly stable structure. It is dominated
by a few supermarket chains, almost all of them – well–established brands. The top five include
"Tesco", "Sainsbury 's", "Asda, "Morrisons" and "Waitrose".
Just a few years ago, the UK 's now one of the largest supermarket chain Lidl do not cause any
particular emotion or fear. Today, the picture has changed dramatically.
Discount grocery retailers have witnessed significant sales growth over the past 5 years since
consumer had to tightened up their budget due to economic recession which have led many
middle–income and affluent consumers to shop in places like Lidl or Aldi. A price war between the
leading supermarkets chains abd discount stores had started. Discount shops demand an increasing
market share of all UK grocery sales, as the social stigma associated with them have been changed
and the discounters started to launch premium product ranges to appeal to the luxury marketplace.
The first, and most discussed, is that discount shops have started to move from being niche
operators into being considered more like mainstream supermarkets. The average Lidl customer is
now demographically similar to one of Tesco's shoppers. As a result of their recent success, Aldi
and Lidl now have 8.6% of the grocery market, share they have taken from the major players.
Reuters UK reported on the findings from Kantar Worldpanel in April 2014 that Aldi and Lidl are
likely to double

economic climate uk
MATTEO
Exchange rate
Housing issues
Private and public consumption
Investments opportunities: pros and cons
EXCHANGE RATE
Sterling has been floating since the UK withdraw from membership of the ERM in September 1992.
Since that moment, the Bank of England has not intervened to influence the pound's value, as it
became independent from the UK government.
With a free floating exchange rate, the value of the currency is simply determined by supply and
demand of the market. The Central Bank cannot set a target exchange rate and intervene in the
market exchange rate for this purpose.
The advantages of a free floating rate are several:
No exchange rate target, so the Central Bank doesn't need to hold foreign reserves;
Use of...show more content...
This recovery is mostly due to the government schemes to make credit more easily available and to
the accommodative monetary policy of the Bank of England. The credit easiness results in a higher
demand from the market, with obvious positive implications in the field.
However, some experts say that the main risk that could arise is the outbreak of a new housing
bubble. The proof of this would be the leap in house prices in London of 10.2% between September
and October.4
Many argue, however, that the problem would be simply due to the fact that the offer has not been
able to adapt to a growing demand, after the sharp decline in the previous years.
PRIVATE AND PUBLIC CONSUMPTION
According to the Office for National Statistics5, in Q2 2013 private spending (adjusted for inflation)
grew by 0.3% on previous quarter, reaching ВЈ661m. In terms of volumes, household spending has
increased by 0.3% but still remains 2.8% below the peak of spending in Q4 2007. Anyway, the
recovery of private consumption is slowly materializing, since consumption in terms of volume are
4% higher than the recent low in Q2 2009.
The chart below shows the private consumption developement by quarter.
If instead we focus on the value of consumption at current prices,we will notice that in the second
quarter 2013 current price spending increased by 0.9% compared with Q1, continuing the positive
trend of growth

The Economic System Of The Uk
Report by AI BING
The economic system in the UK, and evaluate its effectiveness.
Introduction
Firstly, British economy introduction. Secondly, the top field in the UK. Then is fortune global 500.
Finally, the economic impact to the people.
The British economy as an important trade entity, economic power and financial center, is the
world's fifth–biggest economy, is one also the world's most affluent, the most developed and one of
the highest living standards in the world. It is important that British capital London is one of the
world's two big international financial centers, along with New York. This report will discuss the
economic system in the UK, and evaluate its effectiveness. (Internations, 2016)
Content
The British economic system has six major categories. In agriculture, British agriculture is highly
concentrated, highly mechanized and efficiency is very high. In heavy industry, Britain has large
coal, natural gas and oil reserves. In tourist industry, Britain's tourism industry is very important,
each year more than 27 million Chinese tourists visit the UK, ranked seventh in the world. In
manufacturing industry, Britain status has declined but we still manufacture petroleum products,
computers, televisions and mobile phones. In service industry, particularly banking, finance,
shopping, insurance and business services as a share of GDP, the largest and leading status in the
world. In education, British education is a world leader include education and

Discuss how far recent UK economic policy has been successful in achieving the macroeconomic
objectives.
The four main macroeconomic objectives are: full employment, price stability (low and stable
inflation), sustainable economic growth, and a healthy Balance of Payments.
A diagram showing unemployment and jobseekers allowance in the UK:
On the diagram shown above, unemployment within recent years (2008–2013) is seen to be
increasing. In 2011 unemployment peaked at 2.6 million which around the time the chancellor
George Osborne said "...the government was continuing efforts to help create new jobs" followed
by "Policies like enterprise zones... are going to make a real difference". The policy in question is a
supply side policy,...show more content...
In 2012, the rate of inflation fell rapidly as seen in the inflation diagram.
How Europes economy effects the UK
The Eurozone looks more vulnerable than ever before. In this climate of debt default, investors
have shown preference for government bonds outside the Eurozone, where there is less risk of
liquidity shortages. The Eurozone's troubles have led to weakening of the Euro and making
Sterling relatively more attractive. This appreciation in the sterling pound will reflect upon the
price competitiveness on exports which will decrease therefore lowering demand for our goods
domestically and abroad by foreigners which will decrease our net exports (a component of AD)
and so shifts the AD curve inwards from AD–AD1 resulting in a decrease in inflationary pressure but
at the expense of economic growth as the AD curve recedes. Further consequences are that the
current account deficit increases therefore weakening the balance of payments. Also due to the
negative growth in AD businesses and consumers may lose confidence in the economy, therefore
demand for goods and services decrease and businessed do not invest in capital or labour so
contributes to a higher rate of unemployment/redundancy.
So the UK government uses a combination of fiscal, monetary and supply side policies to achieve
their macroeconomic

U.K. Economy Essay
U.K. Economy
The UK government currently has four main macroeconomic aims that it is pursuing. These aims
are those of low unemployment, low inflation, and high and stable economic growth as well as a
favourable balance of payments current account position. This essay will concentrate on the
government's success in the first three of its aims listed above and how these macroeconomic aims
can or have been achieved using fiscal and monetary policy. Fiscal policy is used to affect aggregate
demand by altering taxation and government spending; monetary policy also affects aggregate
demand by the manipulation of interest rates and the supply of money.
Economic growth is the prime measurement of a country's economy as it...show more content...
Indeed, inflation since 1990 has remained remarkably stable by UK standards, however in February
2003 the RPI rose to 3.2%, mainly due to clothing and petrol prices going up.
Monetary policy has allowed the UK to enjoy low levels of inflation for a number of years now, in
particular since the 1990's. This can be seen in the diagram below, where the Bank of England have
been able to meet the 2.5% target (+ or – 0.5%) through the skilful use of interest rates. Generally, if
inflationary pressures on the economy are high, the MPC reacts by increasing interest rates.
This increase in interest rates causes a fall in aggregate demand from
AD1 to AD2 and thus a fall in inflation from P1 to P2 via the following transmission mechanisms.
Consumption, a component of aggregate demand (consumption + investment + government
spending +
(exports–imports)) falls as the cost of credit increases due to more interest having to be repaid and
thus big ticket credit purchases become relatively more expensive, as the opportunity cost of
spending increases (as more interest is forgone) and as the effective disposable income of consumers
on variable rate mortgages falls.
Furthermore, investment falls as firms are less willing to obtain more expensive credit through
borrowing and more likely to

Econ 25 Marker
Extract B (lines 5 – 7) states: 'This plan, laid out by the Coalition Government, implies the longest
and deepest sustained period of cuts to public spending since the Second World War'. Using the data
and your economic knowledge, assess the likely impact of substantial cuts in public expenditure on
the performance of the UK economy. Public expenditure – Spending made by the government of a
country on collective needs and wants such as pension, provision, infrastructure, etc. The
performance of the UK economy depends very much on the level of Aggregate demand within the
economy. AD=C+I+G+(X–M). The UK economy can be judged by a number of key indicators
mainly sustainable economic growth, low inflation (target 2%), a surplus on the...show more
content...
This will be beneficial in the long term because private sector will increase investment in capital
goods, which is an injection into the circular flow of income and will also lead to a shift of the
LRAS to the right. Secondly, the extent to which, if at all, cuts in public spending are
unavoidable given the size of the budget deficit, so I feel that the government addressing this
through cuts on public expenditure is a positive. Although, I do believe to some that significant
cuts in some areas may lead to disruption and there may be some alternates such as increasing
taxation and their relative merits. As a result, LRAS will increase to LRAS 1. This is very
beneficial as more output will be generated and supplied at the same price level, which will lead to
an increase in the welfare of the UK

Consequences Of Brexit
Estimating the effects of Brexit
To forecast the consequences of the UK leaving the EU, we must make assumptions about how
trade costs change following Brexit. It is not known exactly how the UK's relations with the EU
would change following Brexit, which means that there is a lack of clarity over the consequences
of Brexit for trade costs between the UK and the EU. To overcome this difficulty, we analyse two
scenarios: an optimistic scenario in which the increase in trade costs between the UK and the EU is
small, and; a pessimistic scenario with a larger rise in trade costs.
The optimistic scenario assumes that in a post–Brexit world, the UK's trade relations with the EU
are similar to those currently enjoyed by Norway. As a member of theEuropean Economic Area
(EEA), Norway has a free trade agreement with the EU, which means that there are no tariffs on
trade between Norway and the EU. Norway is also a member of the European single market and
adopts policies and...show more content...
Trade can have positive effects through increasing competition, which reduces excess profits and
promotes efficiency. Competition, access to superior intermediate goods and a larger export market
can also stimulate innovation. Recent research finds that dynamic effects may double or triple the
size of the static effects reported in Table 1 (Bloom et al, 2014; Sampson, 2016).
An alternative way to evaluate the consequences of Brexit is to use the results of reducedform
empirical studies of the effects of EU membership. Baier et al (2008) find that after controlling for
other determinants of bilateral trade, EU members trade substantially more with other EU countries
than they do with members of the EEA or EFTA. Their estimates imply that, if the UK leaves the
EU and joins EFTA, its trade with countries in the EU will fall by about a

The United Kingdom : Five Main Sources Of Law
The United Kingdom has five main sources of Law. The first source of Law is UK Parliament
who are the supreme legislative branch of the UK. Parliament are responsible for debating and
passing new Legislation. UK Parliament consists of The House of Lords House of Commons
and the monarchy. A second source of Law is known as Delegated legislation this is when
Parliament delegates power to another party over a specific legislation using Legislation known
as a parent act. There are three types of this Law these are as follows, Statutory instruments,
Orders in council and Bylaws. Thirdly there is a source of Law known as a Judicial precedent,
this is formed on the previous decisions of judges and works based upon the 'Stare Decisis'
Furthermore many Laws are forced into UK Legislation by the European Union. This is due to
the UK being a member of the EU so therefore has to incorporate any EU legislation into UK
Legislation. Finally The European Court of human rights, this is responsible for policing
international governments of member states and ensures they follow European Legislation so by
this nature is considered a source of UK law. This source of law is based upon the European
convention of human rights ECHR Judicial precedent The source of law known as a judicial
precedent (also known as a common law or case made law) is a form of Law that requires no
legislation as it is considered on a case by case basis based upon the principal of 'Stare Decisis'. The
Stare decisis is

The financial services sector has a vital role to play in the UK economy. The 2007–2008 financial
meltdown, also termed as the Global Financial crisis is considered by many as the worst financial
crisis since the Great Depression of the 1930s. The crisis which began with a run on a major
high–street bank s, Bear Stearns and Lehman Brothers and resulted in part–nationalisation of two of
the largest banks in the world, and left the UK economy vulnerable was purportedly caused by the
failure of financial institutions to manage themselves judiciously, and of regulators to discern the
risks that were building up across the system as a whole.
The argument whether and how to regulate the financial services industry in UK seems to have been
marred by tints of abuses and scandals. The Banking Act 1979(BA'79) was perhaps the first UK Act
to put banking regulation on a statutory footing, moving away from the previous derelict
self–regulatory approach. The crisis in the Johnson Matthey Bank in 1984 which exposed the
deficiencies in the 1979 Act could be considered as the impetus for the advent of Banking Act
1987 and the departure of the former. The 1987 Act increased the Bank of England's(BoE)
supervisory role by imposing duty on BoE to supervise the banks. The 1991 Bank of Credit and
Commerce International the 1995 Barings Bank collapse, the 1970's Secondary Banking crisis etc.
are some of the instances which indicate the deficiencies of both the Banking Acts and the BoE's

Financial Crisis Impact on Uk Government
ROLE OF THE GOVERNMENT
The UK government has announced a package of measures aimed at rescuing banking system that
makes 400 billion pound.
100 billion pound will be available in short term loans from bank of England on top of an existing
loan facility.
Banks will have to increases their capital by at least 25 billion pound and borrow from government.
An additional 25 billion pound in extra capital will be available in exchange of preference shares.
Government described as the root cause of current financial crisis is liquidity, capital and funding
At least 200 billion pound will be made available from bank of England for short term borrowing to
provide liquidity to banks
Those banks who wished to strengthen capital ratios...show more content...
Since the market began to tumble in 2008, Governments around the world have spent almost $ 11
trillion bailing out falling banks and trying to repair the financial system
As per the IMF data all the governments of the world has so far spent more than $ 10.8 trillion to
avoid the ill effects of last years financial crisis. Out of this huge sums are spent by the rich nations.
[pic]
Out of this the maximum amount is spent as guarantee given to save the existing banking system,
which was effected by last year's crisis. This crisis was worst than the great depression of 1929.
US had spent $ 3.6 trillion to bailing out failing banks and repair the financial system. 25.8% of total
GDP for bailing out ie 25.8% of the total GDP, which is $ 10,000/– per person.
UK had spent $ 2.4 trillion as 94.4% of GDP for bailing out failing banks. ie 94.4% comes around $
50,000/– per person.
The private financial sectors also have estimated write–offs amounting to $ 4tn, of which two–third
are losses suffered by big international banks such as Citigroup and RBS. About half of these losses
write–offs of securities backed by failed mortgages.
UK government has spent 94.4% of the GDP to bail out the banking system as follows:
[pic]
In–spite of this UK is not comes out the recession and the last quarter was

Fiscal And Monetary Policy In The UK
The UK government uses both Fiscal and Monetary
Policy in its control of the economy:
Analysis and Discussion.
'The Business Environment Report' submitted to
The College of Technology London.
Submitted By: Max Pereira Enrolment No: 083799–84 Section: MEP 2 Email:
max.pereira@stu.ctlondon.ac.uk Word Count: 3000 words
Under the Guidance of
Lecturer: George Olusoji
1. Abstract
We are all aware of the present world crisis and the recession period in which United Kingdom is
progressing. Any individual may be inquisitive about what the government of UK is doing in this
case and how the government...show more content...
In order to maintain the economic stability and growth the government uses two common strategic
approaches towards management of the economy which are:
1: Fiscal policy: concentrating on stimulating the economy through changes in the government
income and expenditure.
2: Monetary Policy, which influences the circular flow of income by changes in the supply of
money and interest rates (Palmer and Hartley, 2006).
4. Methodology
The methodology used to discuss and analyze the given topic would be Case study, which will act
as a primary source of data. Yin (2003) recommended the use of case–study protocol as part of a
carefully designed research project. He also added that case studies can be either single or
multiple–case designs. Single cases are used to confirm or challenge a theory, or to represent a
unique or extreme case. Uma Sekaran (2003) supports the justification for this methodology
according to whom, case studies involve in–depth and background analyses of relatively similar
situations within one environment and compare that of other. She also commented that case studies
provide more of qualitative data rather than quantitative data.
As the topic suggested, the environmental subject of the case study would be UK. It may be noted
that UK was one of the few member nations which was invited to the G–20 meet held on 14–15 of

November 2008. And since the G–20 is a forum that brings together important industrial

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